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August 27, 2017

As a pediatrician I am often counseling high school Juniors and Seniors about their plans after graduation. Most, if not all, tell me they are going to college. I should say that is great!  “You need a college degree to be successful.” “Education is the new currency.” “A high school diploma will get you nowhere.” But what about the price tag? Most seniors in high school know very little about the economics of higher education.

The tuition alone for Princeton undergrad is $41,820.00 per year; for Stanford, it is $65,316.00. The in-state tuition for the University of Maryland is $7,612.00. When you add the room and board and fees, you can easily tack on another $15-20,000 per year.

So now, let’s look at this… the cost of a gallon of milk may be $2.49 at your popular grocer but may be $2.79 at Seven-Eleven. When comparing milk to college tuition range of prices, there is a HUGE difference.  Now, one may argue, the quality of education from one school may be far better than another, whereas the quality of milk does not vary much. That may be so, but I would counter-argue that no matter where you get your college degree from in 2017, it appears your chance of getting a top notch job may be no better than the high school graduate who has, by now, accumulated job experience.    

The cost of annual tuition at Prince Georges Community College, here in Maryland, (12 credit hours) is $3,650.00. WOW!!! What a savings! So let’s do some math: If you went to Prince Georges Community College for two years at a cost of $7,300 and went on to University of Maryland for two years @$55,224.00 (tuition and room and board) you would have saved yourself $278,740.00 for not going to Stanford!!!  Think about if you took those savings and invested them into safe markets (mutual funds, IRAs and Roth IRAs) you’d probably be a wealthy 50 year-old retiree.

Now there are exceptions. Getting into medical school, law school and other graduate programs generally require (but not always) 4 years of college and a college degree. But this still doesn’t mean that you have to go to a college that zaps so much of your future income that paying back student loans make take the rest of your life. Go to a school who’s price tag is reasonable; perform the best that you can (you may get scholarships) and ENJOY college life. If you have chosen the right fit for you, these will be the most exciting, memorable years of your life. It is also a time where we meet our long term friends and future spouses.

For those students who have no clue what they want to do, it may be very valuable to consider technical schools in fields that may be attractive. It may be valuable to work first and/or combine work with one or two courses. I will never forget about 10 years ago, a high school senior told me he did not want to go to college, but, instead, wanted to go to HVAC School (training in heating, ventilation, and air conditioning). It took him one year of school and one more year of apprenticeship training before his first job started him at $49,000 per year. He was only 20 at the time!

Finally, there are those students who have a passion for marketable goods and or services that would qualify for them to become extremely wealthy through entrepreneurship. Today’s internet makes many things possible. Yes, a course in business may be helpful, but that does not set your finances back for decades.

So parents, be careful in these new times when guiding your kids toward their careers. Many times YOUR financial plan may be disturbed if you co-sign or take parent loans on behalf of your kids. Let them know that the “YOU ARE GOING TO COLLEGE!” may not apply anymore. Feel them out as to their talents and desires. Sometimes simply working for a while and establishing discipline may be the best thing for them.        

 ….see you in the Fall

Dr. “D”

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